The RAND Coporation has released a brief examining the impact of high-deductible health plans (HDHPs) on health spending and utilization.  The authors found that enrollment in HDHPs reduced costs but also decreased utilization of preventive care.  The brief suggests that policymakers find means to promote increased preventive care service utilization.

From the report: 

Relentless growth in health care costs is driving a search for solutions. One popular approach is the use of high-deductible health plans or a variation known as "consumer-directed" health plans, which combine a high deductible with a tax-advantaged health account whose funds roll over from year to year. These plans are intended to cut health spending by encouraging consumers to be more cost-conscious about their health care decisions. By 2009, about 20 percent of Americans with employer-sponsored health coverage were enrolled in high-deductible plans. A 2010 survey found that more than 54 percent of large employers offered at least one such plan. Yet despite growing enrollment, little is known about how these plans affect health care spending or the use of services.

Full report: High-Deductible Health Plans Cut Spending but Also Reduce Preventive Care

RAND Corporation.  (2011).  High-deductible health plans cut spending but also reduce preventive care.   

This report published in Psychiatric Services reviewed the recently implemented reimbursement policies for screening and brief intervention for substance misuse by Medicaid, finding that though many states allow the reimbursement of this service, current policy is not sufficient at promoting high utiltization.

Fussell, H. E., Rieckmann, T.R., and Quick M.B. Medicaid reimbursement for screening and brief intervention for substance misuse.  Psychiatric Services, 62: 306-309. doi: 10.1176/appi.ps.62.3.306. http://psychservices.psychiatryonline.org/cgi/content/abstract/62/3/306

Authors: Holly E. Fussell, Traci R. Rieckmann, and Mary Beth Quick

This report published in Health Services Research examines strategies that Idaho and Kentucky used to increase preventative care for children. Among the findings, the report concluded that raising state Medicaid and CHIP reimbursement rates for well-child visits increases the likelihood that providers offer these services. The report also includes general background information behind these policy changes.

Kenney, G.M, et. al. (2011).  The Effects of Medicaid and CHIP Policy Changes on Receipt of Preventive Care among Children. Health Services Research, 46(1): 298-318. doi: 10.1111/j.1475-6773.2010.01199.x. http://onlinelibrary.wiley.com/doi/10.1111/j.1475-6773.2010.01199.x/abstract

This report published in Health Services Research examines strategies that Idaho and Kentucky used to increase preventative care for children. Among the findings, the report concluded that raising state Medicaid and CHIP reimbursement rates for well-child visits increases the likelihood that providers offer these services. The report also includes general background information behind these policy changes.

Kenney, G.M, et. al. (2011).  The Effects of Medicaid and CHIP Policy Changes on Receipt of Preventive Care among Children. Health Services Research, 46(1): 298-318. doi: 10.1111/j.1475-6773.2010.01199.x. http://onlinelibrary.wiley.com/doi/10.1111/j.1475-6773.2010.01199.x/abstract

Lesser, L., et. al. (2011). Comparison between US Preventative Services Task Force recommendations and Medicare coverage. Annals of Family Medicine, 9(1):44. ttp://www.annfammed.org/cgi/reprint/9/1/44

Authors: Lenard I. Lesser, Alex H. Krist, Douglas B. Kamerow, and Andrew W. Bazemore

The Robert Wood Johnson Foundation (RWJF) released a report and policy brief finding that increased cost-sharing may not effectively reduce the rate of health care spending growth.  Examining the impact of increased cost-sharing on individuals’ health spending and outcomes, the authors suggest that reductions in service use only modestly impacts overall health spending because the majority of insured individuals are healthy.  In addition, RWJF determined that individuals do not accurately discriminate between essential and nonessential health services when responding to increased cost-sharing.  Although affected patients reduced emergency room utilization, they also reduced their use of preventive care and essential drugs.  Finally, the authors found that increased cost-sharing had an adverse effect on vulnerable populations, including the elderly, the chronically ill, and low-income individuals.

From the report:

With the passage of the Patient Protection and Affordable Care Act (PPACA), efforts at health care reform are focused on two major issues. One is how to implement the expansion of insurance coverage to most of the country’s population. The other is how to slow the growth in health care spending. Intertwined in both issues is the question of what form and degree of cost-sharing should be expected of consumers. How medical care costs are shared between patients and insurers in minimally creditable policies could affect both the level and rate of growth of national health care spending.

Health insurance has an inherent tension between the benefit of reducing people’s exposure to financial risk and the drawback of increasing people’s use of low-value or unnecessary medical care that can drive up health care spending. Exposure to financial risk is greatly reduced as the fraction of health care costs covered by insurance increases. But as insurance covers more costs, people tend to use more care, some of which is unnecessary or low-benefit relative to cost. In particular, people would not use much of this low-value care if they had to pay the full cost. Health insurance design is, as Aaron (1) notes, a “potentially powerful tool for controlling the level and composition, if not the rate of growth, of people’s demand for [health] care.” (p. 22). Thus, deductibles, coinsurance and co-payments (different forms of consumer cost-sharing) affect people’s demand for health care. Cost-sharing also affects demand for specific types of health care differently if the cost-sharing is not applied uniformly and/or benefits from different types of health care vary across people based on their characteristics and risk preferences (1, 135). Policymakers are acutely aware of this tension in health insurance. Concerns about how much faster health care spending has been growing compared with GDP have been voiced by many public and private sector policy-makers. These concerns have stimulated debates about the merits of increasing cost-sharing to discourage demand for low-value or unnecessary health care.

Full Report:  Cost-sharing: Effects on spending and outcomes (PDF |369 KB)

Policy Brief: Cost-sharing: Effects on spending and outcomes (PDF | 253 KB)

Robert Wood Johnson Foundation. (2010). Cost-sharing: effects on spending and outcomes. Swartz, K.